Thailand’s Central Bank kept its benchmark interest rate unchanged, supporting Thailand’s “fragile” economic recovery, reports Suttinee Yuvejwattana for Bloomberg. The government has attempted to revive growth by increasing spending and stimulating consumption. (Hurdles Thailand has to overcome).

Finance Minister Korn Chatikavanij expects GDP to expand by as much as 4% in the last quarter of 2009 on increased government spending and improvements in exports. The ministry projected a 19% drop in exports this year, followed by a 10% rise next year. (Reasons to watch Thailand)

Moody’s kept a negative outlook for Thailand’s credit rating, stating that “political unrest could erupt again.” Protests that ousted the previous regime in 2006 have hurt consumer confidence.

Thailand’s economy is likely to contract 3.5% to 4% year-over-year in the third quarter and is expected to grow 3% to 4% year-over-year in the fourth quarter, writes Orathai Sriring for Forbes. Improvements in the third quarter from the second quarter were attributed to improvements in consumption, investment and exports.

For more information on Thailand, visit our Thailand category.

• iShares MSCI Thailand (NYSEArca: THD): up 62.8% year-to-date

Max Chen contributed to this article.

South Korea’s growth in the third quarter was at its quickest rate in more than seven years, accompanying China and Singapore in reporting faster growth during the September quarter, reports Gillian Murdoch for Reuters. (How to capture China’s growth).

• iShares MSCI South Korea Index (NYSEArca: EWY)
• iShares FTSE/Xinhua China 25 Index (NYSEArca: FXI)
• iShares MSCI Singapore Index (NYSEArca: EWS)

Japan, Singapore, Hong Kong, Thailand and Taiwan all officially exited a recession in the second quarter.

• iShares MSCI Japan Index (NYSEArca: EWJ)
• iShares MSCI Hong Kong Index (NYSEArca: EWH)
• iShares MSCI Thailand Invest Mkt Index (NYSEArca: THD)
• iShares MSCI Taiwan Index (NYSEArca: EWT)

Japan, however, grew 0.6% in the second quarter – less than expected. (Small-cap plays for Japan).

Singapore’s economy expanded in the second quarter at its fastest rate in almost six years, as a result of a surge in biomedical production and construction. (Sectors pushing Singapore’s growth)

Hong Kong pulled out in the second quarter after its economy grew at a faster-than-expected 3.3% from the previous quarter. (Is Hong Kong facing a correction?)

Thailand’s economy grew 2.3% in the second quarter from the first quarter on a recovering manufacturing sector. (Reasons to watch Thailand)

Taiwan’s economy saw growth for the first time in a year during the second quarter. Officials expect rising demand from China to support the island’s recovery. (Why Taiwan’s heating up).

• iShares S&P Asia 50 Index (NYSEArca: AIA)
• BLDRs Asia 50 ADR Index (NasdaqGM: ADRA)

For more information on Asia, visit our Asia category.

Max Chen contributed to this article.

India’s economy is forecast to see “definite signs of recovery” in the second half of the current fiscal year, reports The Economic Times. Growth is predicted to be in the 6% to 6.5% range. But there are a number of investors who want to expand their horizons beyond the BRIC countries.

While BRIC countries have been growing and moving, the expansion of other developing nations is widening the choices investors have. For instance, Vietnam, Thailand and Turkey have all gone through growth that is every bit as significant, explains Don Dion for TheStreet.

While the idea of Vietnam or South Korea may appear refreshing if you’re looking for some fresh blood for your portfolio, it’s key to remember that emerging markets entail risk. The best thing to do is watch on the sidelines for the moving averages, then get in slowly. If you enter with a discipline and a sell point, you’ll check your emotions at the door.

As Don Dion for The Street explains, these funds can be volatile, so a small asset allocation to these funds is appropriate if you plan to take a buy-and-hold approach.

The consideration that goes into single-country ETFs is that as an investor, you are subject to politics, social traumas and reforms, and of course, concentration in a particular sector. This re-iterates the need for every investor to brush up and do some research before going in.

A sample of BRIC ETFs, and a couple alternatives:

• iShares MSCI BRIC (NYSEArca: BKF): up 66.9% year-to-date
• Claymore/BNY BRIC (NYSEArca: EEB): up 66.1% year-to-date
• Market Vectors Russia (NYSEArca: RSX): up 104.3% year-to-date
• iShares MSCI South Korea (NYSEArca: EWY): up 67.3% year-to-date
• Market Vectors Vietnam (NYSEArca: VNM): up 10% since Aug. 14 inception
• iShares MSCI Turkey (NYSEArca: TUR): up 84.3% year-to-date
• iShares MSCI Thailand (NYSEArca: THD): up 73.6% year-to-date

For more stories about BRIC ETFs, visit our BRIC category.

Economic data for the second quarter reveals that the worst may be over for Thailand, writes Supunnabul Suwannakij for The Wall Street Journal.

• External demand for Thailand’s goods is recovering, domestic consumption is increasing and the government is spending more.
• Ampon Kittiampon, head of the National Economic and Social Development Board, expects the Thai economy to likely show year-to-year growth by the fourth quarter.
• Finance Minister Korn Chatikavanij stated that Thailand’s government will put $31.3 billion into three-year investment programs in transportation, health and education, which could boost the economic growth by 2.5% per year, report Daniel Ten Kate and Haslinda Amin for Bloomberg.
• The government expects growth to resume in 2010 as both internal and external demand grow.

But some risks remain, such as a possible hit to tourism from the swine flu outbreak, Thailand’s political instability and higher production costs with rising oil prices.

The economy contracted 4.9% in the second quarter year-over-year, but grew 2.3% compared to the first quarter. The government estimates that GDP could decline as much as 3.5% in 2009, followed by an expansion by as much as 3% in 2010.

• iShares MSCI Thailand Invest Mkt Index (THD): up 61.5% year-to-date

For more information on Thailand, visit our Thailand category.

Max Chen contributed to this article.

Prime Minister Abhisit Vejjajiva says the economy is on its way to recovery as the government’s stimulus plans take effect, reiterating a projected positive annual growth by the fourth quarter, reports Vithoon Amorn for Forbes. Vejjajiva cited the rise in production, factory capacity utilization, sales tax collection and exports.

However, Thailand faces a number of challenges:

• Thailand’s industrial production fell for the eighth consecutive month in June after a reduction in global demand for automobiles and processed food, two of the country’s biggest exports, writes Ron Corben for VOA News. Exports, which fell 25% in June, make up 60% of the country’s GDP. Imports also dropped by 25%.
  

• The Central Bank estimates a possible 4% contraction this year. The bank is depreciating the baht by allowing more companies to invest overseas in an attempt to make Thai exports cheaper.

• The Consumer Price Index dropped 4.4% year-over-year in July, reports Piyarat Seithasiriphaiboon for The Wall Street Journal. The ministry has adjusted its inflation target to between a 1% to 0% contraction this year. Core inflation, not including energy and food costs, decreased 1.2% year-over-year.

Economists think key rates will remain unchanged at 1.25% and will remain so until 2010. The Central Bank kept rates unchanged since the current level supports Thailand’s economic recovery.

• iShares MSCI Thailand Invest Mkt Index (THD): up 57.7% year-to-date

For more information on Thailand, visit our Thailand category.

Max Chen contributed to this article.

In Japan, the country’s exports and industrial production is on the mend. Analytical data points to an economy that is bottoming out, which has led to a Japanese small-cap rally. Small-cap companies tend to be more capable of adapting to the changing economic environment.

• SPDR Russell/Nomura Small Cap Japan (JSC): up 4.6% year-to-date; up 6.8% in the last month

• iShares MSCI Japan Small Cap Index (SCJ): up 3.4% year-to-date; up 5.1% in the last month

Thailand is another country that is starting to climb out of its economic hole. Spurred by government spending, job creation is on the rise. If there are any hiccups in the stimulus efforts, a second package is at the ready. Meanwhile, Thailand’s Prime Minister Abhisit Vejjajiva said he believes the country’s economy will post a positive growth rate by the end of this year.

• iShares MSCI Thailand Invest Mkt Index (THD): up 41.8% year-to-date; up 6.1% in the last month

Most experts note the recovery in world economies will start in emerging markets. These countries will be moving independently from developed countries.

• Claymore/BNY Mellon Frontier Markets (FRN): up 28.4% year-to-date; up 7.7% in the last month

Chile has been blessed with natural resources and the country is reaping the benefits of its commodity cache. The country’s financials are in order and Moody’s increased the country’s credit rating on an optimistic outlook. Its economy is only getting stronger with a GDP that rivals most Latin American countries, a decreasing poverty rate and increases in public spending.

• iShares MSCI Chile Investable Mkt Idx (ECH): up 53.3% year-to-date; up 3.3% in the last month

Max Chen contributed to this article.

Government spending has spurred demand and created jobs, lifting the Thai economy out of the deepest throes of the recessions. If there are any hiccups in the stimulus efforts, a second package is at he ready. But for the time being, things are moving in the right direction, according to the Finance Minister Korn Chatikavanij.

Cash handouts have been administered to the poorest and the violent political protests that took consumer confidence are a thing of the past, reports Suttinee Yuvejwattana and Bernard Lo for Bloomberg.

Meanwhile, Thailand’s Prime Minister Abhisit Vejjajiva said he believes the country’s economy will post a positive growth rate by the end of this year. The sharp falloff in exports has shaken consumer confidence, but the strong fundamentals of the country are in place to help lessen the negative impacts, reports China View.

• iShares MSCI Thailand Investable Market Index (THD): up 43.6% year-to-date

The International Monetary Fund has predicted that Thailand’s economy will contract in 2009, writes Emily Kaiser for Forbes. Fiscal and monetary policies will be required to mitigate the contractions. GDP growth may drop in a range from 2% to 4%.

Thailand, Southeast Asia’s second-largest economy, is expected to shrink as a result of diminished exports, which account for 70% of GDP, as well as increases in unemployment, report Shanthy Nambiar and Susan Li for Bloomberg.

The Bank of Thailand cut interest rates by 2.25% to 1.5%. It is unlikely that borrowing costs will reach 0%. The monetary easing has not helped consumers receive loans from cautious, or stingy, banks.

The government has promised to spend another $44.5 billion over three years to help create jobs and jump-start growth. The spending will come from domestic borrowings and possibly $2 billion from international lenders. The public debt could rise to 46% of GDP in 2009.

• iShares MSCI Thailand Invest Mkt Index (THD): down 0.7% year-to-date

Max Chen contributed to this article.

Thailand’s Prime Minister Abhisit Vejjajiva has stated that the nation’s economy will contract in the first quarter and will start seeing positive growth at the end of the year, according to Forbes. Some economists think Thailand’s economy may even contract 1% for 2009. The first quarter will be similar to the fourth quarter of last year, which contracted 4.3%.

Singapore already announced a $13.6 billion stimulus package that would cut corporate taxes, spur bank lending and help households. But Abhisit says that growth will be possible if the government borrows from abroad to provide measures like cash handouts and long-term infrastructure projects.

Finance Minister Korn Jatikavanich calculates a 10% fall in Thailand’s exports this year. This is quite devastating, considering the fact that exports account for 65% of the country’s GDP. To get back on track, Thailand needs to see growth in this area.

In one of the the world’s largest seaports, there are hundreds of ships sitting idle offshore of Singapore with nothing to transport, writes Tom Wright and Patrick Bart for The Wall Street Journal. Exports plunged 26.5% in January compared to the same month last year. It is estimated that manufacturers could cut up to 100,000 jobs this year under waning exports.

The leaders from the 10-member Association of Southeast Asian Nations (ASEAN) gathered in Thailand to determine a course of action for dealing with the effects of the global economic downturn, reports Stephen Wright for The Associated Press.

A major development is the signing of a free-trade pact among New Zealand, Australia and ASEAN, which will hopefully stop any protectionist policies among the trading partners. The finance ministers are talking about expanding emergency currency funds to $120 billion from $80 billion.

• iShares MSCI Thailand (THD): down 7.8% in the last month; up 3.1% in the last three months

Emerging Markets Bounce Back.

• Hopefully the statement will hold true for iShares MSCI Emerging Markets Index (EEM) in the new year with emerging-market countries rich in growing populations, intellectual capital, a growing middle class and growing urban centers. These factors will serve them well when the global economic recovery begins.

Specific emerging-markets that have more potential for prosperity than others include:

• Latin American countries and their ETFs, such as the SPDR S&P Emerging Latin America (GML). Latin American economies are now pondering whether they should inject capital into their economies like the United States and Australia have done, and if so, can they afford it? Also the fact that these countries are making an investment in the future and building up workers’ skills which could pay dividends in the future.
• This brings us to Brazil, iShares MSCI Brazil Index Fund (EWZ), which has taken steps to further educate their workforce. Companies such as Vale, Embraer and Amanco have decided to ameliorate the situation by providing educational tools themselves and even open up universities themselves.
• China and India, First Trust ISE Chindia (FNI) or individually SPDR S&P China (GXC) and PowerShares India Portfolio (PIN), have stagnated this year. But the main points to watch are China’s political reform against economic change as well as India’s economic price for its democracy, presented by terrorist attacks and Pakistan political differences.
• Other countries such as Thailand’s, iShares MSCI Thailand Invest Mkt Index (THD), economy and ETF have been wrought with internal strife but the appointment of a new prime minister may break the trend.

Certain Sectors Have Eyes for Obama.

• President-elect Barack Obama has set plans in motion for large public works projects, and infrastructure is poised to reap the benefits, iShares S&P Global Infrastructure Index (IGF). The soon-to-be President of the United States is gearing up with a more expanded economic recovery plan which will create a projected 3 million more jobs within two years.
• Biotechnology could benefit, too, as Obama is in support of research and development and tax credits for research, the bread-and-butter of the biotech industry. Many believe Obama could approve legislation for federal funding of the research, which has been vetoed by Bush. The iShares Nasdaq Biotechnology (IBB) could win if Obama’s support of the industry goes as planned.
• Another area feeling optimistic about Obama is the clean energy sector, particularly solar. He has promised to support climate change and has pledged $150 billion in clean power investment. Claymore/MAC Global Solar Energy (TAN) could have a chance to shine if this comes to light.

Commodities Could Be on the Rebound

• After a year of frenzied commodity selling, commodity and its related ETF, iShares S&P GSCI Commodity-Indexed Trust (GSG), are looking at a treasuretrove. Jim Rogers, chairman of Rogers Holdings, feels that commodities will be the place to have your money when the United States comes out of the downturn. Eventually, a lack of new supply will lead to shortages again, and since the fundamentals of commodities are still in place, prices will rebound nicely.
• Rogers has specifically noted likely shortages in agriculture and crude oil commodities, United States Oil (USO). For investors who can handle the volatility and sudden price movements, oil can be a long-term play. OPEC announced cuts and many other production cuts around the world are being announced.
• Another commodity, gold and its related gold mining ETF Market Vectors Gold Miners ETF (GDX), is poised for a lucrative gain. In a Fox Business interview, Tom Lydon stated that as more people go to gold, miners will be the first to see profits. The mine owners will hire people cheaper and extraction of gold is now easier which both have helped cut costs.
• Common sense suggests that the increased liquidity and projected consumer spending will cause inflation, which would then lead investors to the relative safety of precious metals. Specifially, investors should take a gander at gold and its related ETF SPDR Gold Shares (GLD).